StanChart eyes insurance business

Standard Chartered Bank (SCB) Kenya Limited has launched an insurance agency business, as the lender looks to grow its earnings from new business lines. It now joins Kenya Commercial Bank Group, another big player in the banking business, which launched a similar product in April this year.

This comes as more players in the banking industry eye the insurance sector-where penetration is still low- by deploying their wider distribution channels and innovation, to push for more business.

Besides enhancing penetration of insurance in the country, Bancassurance, is an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank's client base. StanChart hopes this will be a win-win situation for both the bank and the insurance firm.

"I am confident that though it is still at the formative stage, Bancassurance will be a win-win proposition for clients, insurance companies and banks. Evidently, banks will increase their pool of non-interest income, while insurers will enjoy increased market penetration," said Lamin Manjang, Standard Chartered Bank Chief Executive Officer.

Manjang added that under a bank assurance model, insurance companies will enjoy a lower cost of customer acquisition, penetration in virgin territory, increase in volume and profit and improved brand equity.

"The heightened competition should eventually lead to affordable products," said Manjang.

He made these remarks yesterday in an investor briefing after launching the bank's new insurance product.